'Oman's limited ties not to hamper Bina proj'

Bhopal, July 26: Notwithstanding Oman's ''limited'' financial partnership, work on the Rs 10,000-crore Bina Refinery is in full swing, much ahead of schedule.

Disclosing this to reporters here today, Bharat Oman Refineries Ltd (BORL) Managing Director R P Singh said there was no adverse impact of Oman's decision to restrict its share to Rs 75 crore against its original commitment of Rs 512 crore.

The Bharat Petroleum Corporation Ltd, which entered into a joint venture agreement with Oman for the project, would make up the shortfall of about Rs 437 crore caused by Oman's decision, which was apparently taken due to ''domestic obligations.'' Mr Singh declared that BORL had already finalised financial arrangements for Rs 8,500 crore for the refinery, the revised cost of which had touched Rs 10,378 crore. While it would contribute about Rs 2,000 crore from its coffers, it had firmed tie-ups with 14 banks for Rs 6,400 crore besides the initial share of Rs 75 crore from Oman.

''We shall not allow the project to starve of funds,'' he said, adding that it would consider other options to meet the gap of about Rs 1,500 crore in 2009. ''It may be either through other investors or public issue, to be decided later.'' The MD said several foreign and domestic investors had evinced keen interest in the refinery, which is scheduled to be commissioned by December 2009.

Mr Singh made it clear that Oman's decision had not affected relations. ''There is no divorce. Oman has only limited its financial participation and may return with a bigger contribution in future. It is not a closed chapter. Its representative attends the BORL board meetings.''

With an annual capacity of six million metric tonnes, Mr Singh explained that the refinery would earn the distinction of producing the country's first lot of euro 4 petrol, which would be available in all the metros by 2010. Production would comprise 15 per cent petrol (both euro III and IV), 46 per cent diesel, 10 per cent aviation fuel, 8 per cent kerosene, 5 per cent LPG, 7 per cent coke and 4 per cent naphtha.

Referring to the rapid pace of construction, the MD said the work on laying of the 935 km Vadinar-Bina crude pipeline would commence in April next year. The refinery is expected to receive crude oil from Saudi Arabia and Kuwait.

Terming the magnitude of ongoing work as ''massive,'' he said the BORL would make commitments of Rs 2,000 crore by the end of this year -- the first year of its construction -- for supply of various equipment and work. So far, it finalised commitments of Rs 600 crore.

It would have its own captive cogeneration 96-MW power plant.

Based on pet coke produced in the refinery, it would cost Rs 500 crore.

Mr Singh pointed out that the project had been located at Bina in Madhya Pradesh keeping in view its marketing potential in Delhi and its neighbouring cities.

Referring to its benefits to this state, which had offered a series of sops, the MD said the 1,500-strong labour force belonged to local areas. Besides, preference would be given to workers and engineers hailing from Madhya Pradesh, for which campus placement would be organised in engineering colleges at Bhopal, Ujjain and other towns.

He claimed that Bina would emerge as a ''model metro'' after the commissioning of the refinery. ''There will be no unemployed in any family in Bina once the refinery goes onstream.'' The project, he said, would adopt ''ultra-modern'' anti-pollution measures and would have 500 acres of green belt. ''Pollution levels will be far less in the refinery area than in the rest of the town.'' A sales tax issue has been sorted out with the state government.

After 15 years, the company would be allowed to retain Rs 250 crore of the sales tax paid by it to Madhya Pradesh.

UNI